XBRL Mandatory for Cost Auditor Now !

MCA: Cost Auditors to Report in XBRL FormatReviewed by Admin on May 12.Rating: XBRL Mandatory for Cost
 Auditor Now !Ministry of corporate Affairs has issued circular that cost auditor will now have to file cost audit 
report in XBLR format for the year 2011-12 onwards

It has been decided by the Ministry of Corporate Affairs vide its GENERAL CIRCULAR NO. 8/2012, DATED 
10-5-2012  to mandate the cost auditors and the companies to file Cost Audit Reports (Form-I) and 
Compliance Reports (Form-A) for the year 2011-12 onwards (including the overdue reports relating 
to any previous year) by using the XBRL taxonomy. These reports, required to be filed in the
 XBRL format, would be based on the Taxonomy on XBRL being developed for the formats
 (Form-I & Form-A) given in the following Rules :

(i)  Companies (Cost Accounting Records) Rules, 2011
(ii)  Cost Accounting Records (Telecommunication Industry) Rules, 2011
(iii)  Cost Accounting Records (Petroleum Industry) Rules, 2011
(iv)  Cost Accounting Records (Electricity Industry) Rules, 2011
(v)  Cost Accounting Records (Sugar Industry) Rules, 2011
(vi)  Cost Accounting Records (Fertilizer Industry) Rules, 2011
(vii)  Cost Accounting Records (Pharmaceutical Industry) Rules, 2011
(viii)  Companies (Cost Audit Report) Rules, 2011

Loans Taken By NRI Relative Can Be Paid Residents 

Loans Taken By NRI Relative Can Be Paid Residents !Reviewed by Admin on Sep 20.Rating:

The Reserve Bank of India , has allowed , now ,resident individuals  permission to repay loans availed of from banks in Rupees in India by their NRI close relatives as defined under section 6 of the Companies Act.Read this for knowing meaning of close relative of the resident individual  as defined in Section 6 of the Companies Act, 1956.

A.P. (DIR SERIES) CIRCULAR NO. 19, DATED 16-9-2011

Attention of the AD banks is invited to Regulation 8(d) of the FEMA Notification No.4/2000- RB, dated May 3, 2000 viz. Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000, as amended from time to time, in terms of which the housing loan provided to a non-resident Indian or a person of Indian origin resident outside India by an authorised dealer or a housing finance institution in India approved by the National Housing Bank for acquisition of a residential accommodation in India, may be repaid by any relative of the borrower in India by crediting the borrower’s loan account through the bank account of such relative (relative as defined in section 6 of the Companies Act, 1956).Thus, repayment of loan by close relative in respect of loan in rupees availed by NRI is restricted to housing loans only.

2. The Committee to review the facilities for individuals under the Foreign Exchange Management Act (FEMA), 1999 has in its Report recommended that resident individuals may be granted general permission to repay loans availed of from banks in Rupees in India by their NRI close relatives as defined under section 6 of the Companies Act.

3. The extant provision has now been reviewed and it has been decided that where an authorised dealer in India has granted loan to a non-resident Indian in accordance with Regulation 7 of the Notification No. FEMA 4/2000-RB, ibid, such loans may also be repaid by resident close relative (relative as defined in section 6 of the Companies Act, 1956), of the Non-Resident Indian by crediting the borrower’s loan account through the bank account of such relative.

4. The necessary amendments to the Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000 are being issued separately.

5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

SEBI- Investor Grievance Redressal Mechanism at Stock Exchanges

CIRCULAR

CIR/MIRSD/2/2012 February 15, 2012

All Recognized Stock Exchanges

Dear Sirs,

Subject: Investor Grievance Redressal Mechanism at Stock Exchanges.

1. Please refer to SEBI circular no. CIR/MRD/DSA/03/2012 dated January 20, 2012 and SEBI circular no. SMD/Policy/Cir-32/1997 regarding the investor service centres. At present, the stock exchanges having nationwide terminals, such as National Stock Exchange of India Ltd.(NSE) and Bombay Stock Exchange Ltd.(BSE) operating in equity as well as equity derivative segments are providing investor grievance redressal mechanism and arbitration facility (arbitration as well as appellate arbitration) at four regional centres (Delhi, Mumbai, Kolkata and Chennai).

2. With a view to increase investor confidence in the securities market and in order to make it more convenient to the investors to file their grievances and arbitration cases near to their places, SEBI has initiated steps to set-up this facility by stock exchanges at more centres after examining the data on complaints and arbitrations filed by investors from various regions. In consultation with all the major stock exchanges, it has been decided that initially:

i. NSE and BSE shall set up Investor grievance redressal mechanism at Ahmedabad and Hyderabad by March 31, 2012 and at Kanpur and Indore by September 30, 2012.

ii. NSE and BSE shall provide arbitration facility (arbitration as well as appellate arbitration) at all the above mentioned four new centers by September 30, 2012. They shall abide by all the applicable circulars issued by SEBI in this regard.

iii.NSE and BSE shall have adequate infrastructure and manpower, as considered appropriate, at these new centres to handle investor grievance redressal mechanism and arbitration facility effectively.

3. The Stock Exchanges are directed to:

a. bring the provisions of this circular to the notice of the Stock Brokers and also disseminate the same on their websites.

b. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision in co-ordination with one another

to achieve uniformity in approach.

c. communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report of the following month;

4. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets.

Yours faithfully,

A. S. Mithwani

Deputy General Manager

MCA- Filing of conflicting returns by contesting parties

General Circular No. 1/2012

F. No. 17/135/2011-CL V; Government of India; Ministry of Corporate Affairs; Dated  10thFebruary 2012

To,

 All Regional Directors, All Registrars of Companies

 Sub: Filing of conflicting returns by contesting parties – clarification regarding

 Sir,

 I am directed to invite a reference to Ministry’s circular No. 19 and 20 of 2011 issued on 02.05.2011 laying down certain procedure to regulate cases wherein filing of conflicting returns with regard to appointment of Directors or change of Director/Directors was laid down. In the light of some specific cases wherein it appears that either there was lack of consent of the removed/changed director or due process of Law were not followed, it has been decided to supercede the circulars.

2. In order to avoid such eventualities wherever there is management dispute, the company is required to mandatorily file the attachment relating to cause of cessation alongwith Form 32 with the ROC concerned irrespective of the ground of cessation, viz (a) retirement; (b) disqualification; (c) death; (d) resignation; (e) vacation of office u/s 283 or 313 or 260; (f) removal u/s 284; (g) withdrawal of nomination by appointing authority or (h) absence of re-appointment.

3. In case, any Director is aggrieved with his cessation in the company, he may file complaint in the Investor Complaint Form. On receipt of complaint, the ROC concerned will examine the complaint and mark the company as having ‘management dispute’. Also, the ROC will issue a letter to the company and the parties to settle the matter amicably or get an order/interim order from a Court or Tribunal of competent jurisdiction. Till such dispute is settled, the documents filed by the company and by the contesting groups of Directors will not be approved/registered/recorded and will thus not be available in the registry for public viewing.

SMS and E-mail alerts to investors by stock exchanges

CIR/MIRSD/15/2011 August 02, 2011

To

All Recognized Stock Exchanges

Dear Sir/Madam,

Sub: SMS and E-mail alerts to investors by stock exchanges

1. SEBI receives complaints from investors against stock brokers which include alleged unauthorized trading in their accounts. SEBI has taken steps in the past to address this issue.

2. As an additional measure, it has now been decided in consultation with the major stock exchanges and market participants that the stock exchanges shall send details of the transactions to the investors, by the end of trading day, through SMS and E-mail alerts. This would be subject to the following guidelines:

A. Applicability:These guidelines are applicable to equity – cash and derivative – segments of the stock exchanges.

B. Uploading of mobile number and E-mail address by stock brokers

i. Stock exchanges shall provide a platform to stock brokers to upload the details of their clients, preferably,  in sync with the UCC updation module.

ii. Stock brokers shall upload the details of clients, such as, name, mobile number, address for correspondence and E-mail address.

iii. Stock brokers shall ensure that the mobile numbers/E-mail addresses of their employees/sub-brokers/remisiers/authorized persons are not uploaded on behalf of clients.

iv. Stock Brokers shall ensure that separate mobile number/E-mail address is uploaded for each client. However, under exceptional circumstances, the stock broker may, at the specific written request of a client, upload the same mobile number/E-mail address for more than one client provided such clients belong to one family. ‘Family’ for this purpose would mean self, spouse, dependent children and dependent parents

C. Verification by the stock exchanges:After uploading of details by the stock brokers, the stock exchanges shall take necessary steps to verify the details by any mode as considered

appropriate by them which may include the following:

a. By way of sending SMS and E-mail directly to the investors at the numbers/E-mail address uploaded by the stock brokers.

b. By way of sending letters to the address of the investors uploaded by the stock brokers.

D. Sending of alerts by the stock exchanges:Upon receipt of confirmation from the investors, the stock exchanges shall commence sending the transaction details generated based on investors’

Permanent Account Number, directly to them.

E. Handling of discrepancies, if any:If any discrepancy is observed by the stock exchanges in the details uploaded by the stock brokers including non-confirmation by investors, bounced E-mails, undelivered SMS/letters, etc., the stock exchanges shall inform the respective stock broker.

F. Meeting out the expenses for providing SMS and E-mail alerts:The stock exchanges may use the amount set aside from the listing fees for providing services to the investing public, as provided vide SEBI communication dated SE/10118 dated October 12, 1992, to meet the expenses for providing this facility.

G. Implementation:The stock exchanges shall put in place necessary infrastructure and

implement the SMS and E-mail alert facility at the earliest and not later than four months from the date of this circular.

3. Stock exchanges are advised to :

a. issue necessary instructions to bring the provisions of this Circular to the notice of their constituents and also disseminate the same on their websites;

b. make amendments to the relevant bye-laws, rules and regulations for the implementation of the above, as deemed necessary, in coordination with other stock exchanges;

c. communicate to SEBI, the status of the implementation of the provisions of this Circular in the Monthly Development Report to SEBI;

d. develop the monitoring mechanism through the system of half-yearly internal audit and inspections; and

e. publicize widely the availability of this facility for the awareness of the

investors.

4. This Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and shall come into effect from the date of this Circular.

5. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Circulars”.

Yours faithfully,

V S Sundaresan

Chief General Manager

022-26449200

sundaresanvs@sebi.gov.in

ICSI - SECRETARIAL STANDARD

Secretarial Standards issued by The Institute of Company Secretaries of India: 

•  Meeting of the Board Of Directors (SS-1) 
• General Meeting (SS-2) 
• Dividend (SS-3) 
• Registers and Records (SS-4) 
• Minutes (SS-5) 
• Transmission of Shares and Debentures (SS-6) 
• Passing of Resolution by Circulation (SS-7) 
• Affixing of Common Seal (SS-8) 
• Forfeiture of Shares (SS-9) 
• Board’s  Report (SS-10)

  BRIEF ANALYSIS OF SECRETARIAL STANDARDS :

Meeting of the Board Of Directors (SS1) : 

The Board of Directors of a company holds a fiduciary position. The secretarial standards on meetings of the directors lays down a set of principles which companies are expected to adopt in the convening and conduct of meetings of the Board of Directors and Committees thereof. The standard seeks to enhance stakeholders confidence by focusing on the principles relating to responsibilities of the Chairman of the Board, preservation of minutes, disclosures of Annual Report etc. 

General Meeting (SS2) : 

The secretarial standard on General Meetings prescribes a set of principles which companies are expected to observe in the convening and conduct of General Meetings and matters related thereto. The members of a company exercise their decision making powers through the forum of General Meetings and hence it is essential that standards and best practices are followed by companies in this regard which will also strengthen shareholders confidence.

Dividend (SS3) :

 Declaration and distribution of dividend is a complicated task involving both financial and non-financial considerations. The secretarial standards lays down a set of principles in relation to the Declaration and payment of dividend. It also included interim dividend, treatment of unpaid dividend, revocation of dividend, dividend warrants etc. 

Registers and Records (SS4):

 A company is required to maintain certain registers and records. The standard prescribes a set of principles and good practices in relation to various registers and records including the maintenance and inspection thereof and gives a direction to the companies to establish and maintain systems that a comply with all statutory provisions and meet the needs of the stakeholders. The IT Act2000 permits the maintenance of registers and records in electronic mode. 

Minutes (SS5):  

Every company is required to keep minutes of all proceedings of the meetings conducted during its existence. Minutes kept in accordance with the provisions of the Act. The secretarial standards on minutes has dealt with Minutes of the meeting of:

• The Board or Committees of the Board
• Members
• Debentureholders
• Creditors
• Others as may be required under the Act

Transmission of Shares and Debentures (SS6) :  The Secretarial Standards Board (SSB) formulated the The secretarial standard on Transmission. This standard lays down principles in relation to the  documentation and for verification of legal claimants in case of physically and electronically held shares for the smooth functioning of the process.

SS6 has set standards in several areas to bring clarity and to unify the disparate practices, including

-         Documents required

-         Time period within which the transmission process should be completed

-         Preservation

 Passing of Resolution by Circulation (SS7): 

Decision relating to the policy and operations of  a company are arrived at meeting of the Board, held periodically. It may not always be practicable to convene a meeting of the Hoard to discuss matters on which decisions are needed urgently. In such circumstances passing of resolution by circulation can be resorted. Sec 289 of the Companies Act 1956 enables the Board of Directors to pass resolutions by circulation.  SS-7 authorize the Chairman of the Board or Managing Director and in their absence any other director to decide whether the approval of the Board for a particular  matter is to be obtained by means of resolution by circulation. 

Affixing of Common Seal (SS8):

 SS-8 deals with Affixing of common Seal. The  standard aims at clarifying documents which needed to be common sealed and procedure thereof. The unique feature of the standard is that it introduces the concept of Office seal.

Forfeiture of Shares (SS9) :

This  standard lays down a set of principles for forfeiture both for equity and preference shares arising from non-payment of calls. Forfeiture of shares is to be made only with the approval of the Board. The standard specifies the contents of notice which should be send to the defaulting member. The standard also clarifies about the pricing on re-issue of forfeited shares. 

Board’s  Report (SS10) :   

  The Board Report is the most important means of communication by the Board of Directors of a company with its stakeholders. This standard seeks to lay down certain additional disclosures  which are required to be made in Bard’s Report under various other enactments like disclosures pursuant to employee stock option and employee stock purchase schemes, pursuant direction of Reserve Bank Of India, various disclosures under listing agreement etc. This standard also seeks to cover the approval, signing, dating aspects for its preparation.

 CONCLUSION :

The ultimate goal of Secretarial Standards Board (SSB) to promote good corporate practice and leading to better corporate governance. The standards are fix good secretarial practices and desirable corporate governance with a view utmost transparency, integrity and for play, going beyond the minimum requirement of law. 

QIP- IMP IN PRACTICAL

QIP- IMP IN PRACTICAL

QIP means allotment of equity shares, non-convertible debt instruments and convertible securities by a listed company to Qualified Institutional Buyers (QIBs) on private placement basis as provided under Chapter VIII of SEBI (ICDR) Regulation, 2009.  We may be familiar with preferential allotment, where securities are allotted to some selected people by a company which has its shares already listed in a stock exchange. The main difference between both which we could see at first instance is that QIP allotment can be made only to QIBs and that Preferential allotment can be made to selected persons/organizations including QIBs. Another difference is that, QIP comes under Chapter VIII of SEBI (ICDR) Regulations 2009 while preferential allotment comes under Chapter VII of SEBI (ICDR) Regulations 2009.

QIP scores over other capital raising modes

QIP is a convenient & speedy method of private placement whereby a listed company can issue shares or convertible securities to selected QIBs. The Securities and Exchange Board of India (SEBI) introduced QIP through a circular issued on May 8, 2006 to encourage Indian companies to raise funds from within our country without moving to overseas market. QIP is advantageous when compared to other capital raising methods as the issuing company does not have to undergo time consuming procedural requirements to raise capital. Raising of capital through ADR/GDR is time consuming and expensive.

Who is a Qualified Institutional Buyer (QIB)?

The question who all are considered as QIB are clearly met with under the provisions of ICDR regulations. QIB includes the following persons-

1. a mutual fund, venture capital fund and foreign venture capital investor registered with the Board;

2. a foreign institutional investor and sub-account (other than a sub-account which is a foreign corporate or foreign individual), registered with the Board;

3. a public financial institution as defined in section 4A of the Companies Act, 1956;

4. a scheduled commercial bank;

5. a multilateral and bilateral development financial institution;

6. a state industrial development corporation;

7. an insurance company registered with the Insurance Regulatory and Development Authority;

8. a provident fund with minimum corpus of twenty five crore rupees;

9. a pension fund with minimum corpus of twenty five crore rupees;

10. National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India;

(xi) 2[insurance funds set up and managed by army, navy or air force of the Union of

India;]

Merchant Banker in QIP

Merchant Banker is an organisation that acts as an intermediary between the issuing company and proposed allottees/applicants in the fresh-securities market. Merchant Banker usually engages itself in the business of issue management and acts as manager, consultant, advisor or renders corporate advisory service in relation to such issue management.

A QIP shall be managed by merchant banker(s) registered with SEBI who shall exercise due diligence. The merchant banker would help the company allot securities under a QIP. The merchant banker shall, while seeking in-principle approval for listing of the eligible securities issued under qualified institutional placement, furnish to stock exchange a due diligence certificate stating that the eligible securities are being issued under qualified institutional placement and that the issuer complies with requirements of Chapter VIII.

Important Provisions

The ICDR regulations has laid down certain conditions and restrictions for QIP which are to be complied by the company with out fail. The company shall adhere to the following-

I. Approval of shareholders & validity of S R : The company shall pass a Special resolution approving the qualified institutional placement. Allotment of securities pursuant to the special resolution referred to in clause (a) of ICDR regulation 82 shall be completed within a period of 12 months from the date of passing of the resolution. The provisions of Section 81(1A) of The Companies Act 1956 also would apply to the QIP issue.

II. Listed securities : That same class of eligible securities should have been listed in the stock exchange having nation wide trading terminal for a period of at least one year prior to the date of issuance of AGM notice to its shareholders.

Transferee company in a scheme of merger, de-merger, amalgamation or arrangement sanctioned by a High Court under sections 391 to 394 of the Companies Act, 1956, may make QIP, where the equity shares of the same class of the transferor company were listed for a period of 1 year as mentioned above.

III.  Allotment of securities under QIP : Ensure that the following are complied-

1. Compliance with listing agreement.

2. Compliance with FDI norms in case allotment to NRIs

3. Minimum number of allottees : The number of QIBs to whom shares are allotted shall not be less than:

(a) two, where the issue size is <= Rs.250 crores

(b) five, where the issue size is >= Rs.250 crores

4. Issue Size: No single allottee shall be allotted more than 50 % of the issue size.

5. Mutual Funds: Minimum of 10% of eligible securities shall be allotted to mutual funds: Provided that if the mutual funds do not subscribe to said minimum percentage or any part thereof, such minimum portion or part thereof may be allotted to other qualified institutional buyers;

6. Promoter shall not be allotted shares: No allotment shall be made, either directly or indirectly, to any qualified institutional buyer who is a promoter or any person related to promoters of the issuing company.

“Promoter” means the person(s) who are in control of the issuer or  the person(s) who are instrumental in the formulation of a plan or programme pursuant to which specified securities are offered to public or person(s) named in the offer document as promoters. A financial institution, scheduled bank and foreign institutional investor  who approaches the issuer company which is its subsidiary company or mutual fund/ company promoted by it shall be treated as ‘promoter’.

The following persons are not promoters/promoter group -

a) a person/ director / officer of the issuer  acting merely in his professional capacity promoter:

b) a financial institution, scheduled bank, foreign institutional investor and mutual fund who merely holds 10% or more of the equity share capital of the issuer.

## Also the QIB s belonging to the same group or who are under same control shall not be considered as separate allottees but shall be deemed to be a single allottee.

7.  Partly paid up securities: The issuer shall not allot partly paid up securities, Provided that in case of allotment of non convertible debt instruments along with warrants, the allottees may pay the full consideration or part thereof payable with respect to warrants, at the time of allotment of such warrants: Provided further that on allotment of equity shares on exercise of options attached to warrants, such equity shares shall be fully paid up.

8. Bid: The applicants in qualified institutional placement shall not withdraw their bids after the closure of the issue.

9. Quantum of issue: The aggregate of the proposed qualified institutional placement and all previous qualified institutional placements made by the issuer in the same financial year shall not exceed 5 times the net worth of the issuer as per the audited balance sheet of the previous financial year.

10. Pricing: Issue of shares under QIP shall be made at a price not less than the average of the weekly high and low of the closing prices of the equity shares of the same class quoted on the stock exchange during the two weeks preceding the *relevant date. Where eligible securities are convertible into or exchangeable with equity shares of the issuer, the issuer shall determine the price of such equity shares allotted pursuant to such conversion or exchange taking the relevant date as decided and disclosed by it while passing the special resolution.    

 

Relevant date

Relevant date means date of the meeting in which the board of directors of the issuer or the committee of directors of the issuer decides to open the proposed issue of equity shares.

In case of allotment of convertible securities, relevant date means -

1.  the date of the meeting in which the board of directors decides to open the issue of such convertible securities              

                                                             OR

2.  the date on which the holders of such convertible securities become entitled to apply for the equity shares.

The definition of relevant date under DIP guidelines was different from this definition.

11. Prior Approval from stock exchange to be obtained by submitting the following-

1. Certified true copy of the resolution passed by the Board of Directors approving the placement of securities with Qualified Institutional Buyers (QIBs)

2. Copy of the AGM notice sent to the shareholders of the Company.

3. Certified true copy of the AGM resolution passed.

4. Draft placement document for issue of specified securities to QIBs.

5. Latest shareholding pattern of the Company(LA - Clause 35).

6. Net worth Certificate by the Statutory Auditors of the Company based on the audited figures of the previous FY.

7. Confirmation from the lead Merchant Banker that the issue is being made in compliance with Chapter VIII of SEBI (Issue of Capital & Disclosure Requirement) Regulations,2009.

8. The Managing Director/ Company Secretary of the Company shall confirm that the company has complied with minimum public shareholding under clause 40A & 35 and that issue shall be floated as per chapter VIII of ICDR Regulations.

12. Tenure of convertible securities: The tenure of the convertible or exchangeable securities issued through qualified institutions placement shall not exceed 60 months from the date of allotment.

13. Previous QIP:  atleast 6 months should have elapsed from the previous QIP. However, special resolution is mandatory.

IV. QIP Placement document

The company shall submit the Preliminary Placement Document for being uploaded on the website of stock exchange before the same is circulated to the QIBs or displayed on the website of the Company.

The following shall be submitted to Stock exchange-

1. Hard copy of the preliminary Placement document

2. Soft copy of the Preliminary Placement Document

3. Due diligence Certificate of the lead Merchant Banker in compliance with ICDR regulations.

There is no pre-issue filing of the placement document with SEBI. The (final) placement document shall be serially numbered and copies shall be circulated only to QIBs. The placement document shall contain a disclaimer to the effect that it is in connection with a qualified institutions placement and that no offer is being made to the public or to any other category of investors.

However, a copy of the placement document shall be filed with the Board for its record within 30 days of the allotment of eligible securities.

Disclosures in placement document

Following disclosures are required to be made in the placement document-

• Disclaimer that no offer is being made to the public or any other class of investors.

• Details of Financial statements ie. Consolidated balancesheet & profit and loss account, CFS, Related party transactions etc.

• Merchant bankers to the placement and other advisors

• Details of securities to be issued eg. Convertible securities, equity shares etc.

• Risk factors that is likely to affect our business eg. Increase in price of raw material would affect the business etc.

• Market price information ie. stock price high & close of previous FY ending March 31.

• Use of proceeds after deduction of  (estimated) mgt fees, offer fee, commissions etc.

• Capitalization & Indebtedness Statement

• The audited consolidated or unconsolidated financial statements prepared in accordance with Indian GAAP.

• Report of Independent Auditors on the Financial Statements.

• Managements Discussion and Analysis of financial condition and results of operations

• Industry & Business description

• Organizational structure and major shareholders

• Board of directors and senior management

• Taxation aspects relating to the eligible securities

• Legal proceedings against company and directors both as plaintiff & defendant – under Income tax, excise, customs, Cr. pc etc. which would materially affect the assets/revenue or financial position of the company.

• Proceedings against promoters.

• Accountants

• General information eg. details of shareholder approval, principal objects of company, consolidated financial position etc.

• Any material information which would enable the investors to take an informed decision.

The various penal provisions relating to misstatement in prospectus would apply here also where the director/promoters is found to have made untrue statements in the placement document.

V. Certificates to be issued  by CS

The company secretary shall issue the following certificates to the merchant banker for necessary filings with SE-

a.  Certificate that the issue will be in compliance with the prescribed requirements of Clause 40A and 35 and that  the minimum public shareholding is maintained.

b.  Certificate that the aggregate of the proposed QIP made by the issuer in the same financial year shall not exceed 5 times the net worth of the issuer as per the audited balance sheet of the previous year.

c.   Certificate that the issue will be in compliance with the Chapter VIII of SEBI (ICDR) Regulations, 2009.

d.   Certificate that the new shares to be issued will rank pari-passu with existing equity shares in every respect including dividend.

VI. Non-transferability of securities allotted under QIP

The securities allotted under qualified institutions placement shall not be sold by the allottee for a period of 1 year from the date of allotment, except on a recognised stock exchange.

VII. Listing of securities under QIP

The Merchant banker shall submit the following for listing of securities-

1. Certified true copy of  BoD resolution.

2. Certified true copy of AGM/GM notice.

3. Certified true copy of AGM/GM resolution.

4. Final Placement document copy.

5. Certificates from CS as given in (V) above.

6. Certificate that the issue will be in compliance with the chapter VIII of SEBI(ICDR) Regulations, 2009.

7. Statutory auditors/PCA/PCS on calculation of floor price.

8. Certificate of confirmation from CS  that/on.

a. complied with cl.40 A of Listing agreement.

b. Issue size is 5 times of net worth.

c. Relevant date.

9. Details of issue- opening date & closing date .

10. List of allottees.

11. In-principle approval from SE.

12. Listing fee & processing fee .

13. Shareholding pattern- certified true copy.

14. Certified true copy of amended MOA +AOA.

15. Confirmation that  ‘III (6)’ given above is complied (marked as ##).

16. Copy of forms filed with ROC.

17. relevant documents asked for by the SE.

As said earlier there are many benefits for QIP. However, the success of QIP depends upon the potential of the company, perception of investors about the company, managerial efficiency and general economic conditions.

Please share you valuable views/information on the subject.